Sony may have won the battle against HD DVD, but its Blu-ray format is losing the war against streaming media. Even though the company has yet to announce its financial results for this past fiscal year, which ended March 31, 2014, the company issued a warning that its operating income will be approximately 68% lower than it anticipated.

According to The Verge, a significant part of Sony's lost income results from a rapid decline in demand for physical media, with Europe leading the way.

Quote:

"The second charge is due to what Sony calls "demand for physical media contracting faster than anticipated," especially in Europe. Because of this, Sony says it does not believe the business will generate "sufficient cash flow in the future to recover the carrying amount of long-lived assets." It anticipates an impairment charge on those assets, and a second charge on the overall value of its disc manufacturing business, which will amount to 25 billion yen ($245 million)." read more at The Verge

Sony introduced Blu-ray eight years ago and fought a heated battle with rival format HD-DVD. Sony won out and HD-DVD vanished, the turning point for the format came when Sony included a Blu-ray player in its PlayStation 3 console. However, Sony's victory occurred before Apple got into the movie streaming and download business. Unfortunately for Sony, Apple never adopted the Blu-ray format, in fact Steve Jobs referred to it as a "bag of hurt."

Quote:

"Although Blu-ray is integrated with some Windows laptops, it was never offered by Apple — Steve Jobs famously called the format a "bag of hurt." With the rise of movie streaming and downloads, Sony is now accepting that its disc business is not worth as much as it hoped."read more at The Verge

The media landscape is dramatically different today as a result of Apple's approach. Now, 4K/UHD streaming movies threaten to match or supersede Blu-ray quality. Already, HD video offerings from iTunes, Vudu, Amazon, Xbox, and others come close to what Blu-ray offers.

The main questions are these: is Blu-ray doomed? Would it be pure folly to introduce a new disk-based format? If Sony could not make Blu-ray work, then what hope is there for physical formats in the future?

I don't agree with the notion that streaming is close to the quality of Blu-ray especially in motion. This is evident on a 65" display and even more evident on a 120" screen from proper seating distances, of course.

An even better example is 4k: expensive media player, works only on Sony tv's (even Sony projector owners had to struggle, and pay, to get to see 4k), very high prices for movie purchase and even higher for rentals. And PS4 can't even access them!

Sony has an excellent tradition in killing its own good formats (Betamax, SACD, Memory stick), and Blu-ray makes no exception.

Correction:

Sony has an excellent tradition of trying to create their own licensed formats that fail to gain traction compared to more ubiquitous options. Other examples include theMini Disc, MicroMV and UMD.

Heck, Fisher Price tried to go down the same path in the world of kids products with Pocket Rockers and their audio cassette-based video camera and both failed miserably. Even the XD card effort failed that Fuji used. Compact flash essentially died only because technology took a leap right as they were getting traction in pro cameras, causing a shift toward higher capacity SD cards that people preferred the size of.

Instead of trying to help develop and improve various common formats over the years, such as SD cards and MiniDV, they wanted to strike out on their own so they could own the licensing.

Don't forget, Apple didn't start out by creating things like the Ipod and Iphone. They first turned their business around by releasing those insanely popular multi-color I-Macs. From there, they expanded to those later "ecosystem devices".

Sony simply has never had an ecosystem where they could control what people buy, then create enough demand for those outside of it to buy in. The closest thing they had was the CD, which took off with the Discman. Memory Stick does get some help from the fact that many of Sony's devices use it, but nothing else does.

I though I read the sales figures are actually up for bluray. but down for DVD and physical media segment as a whole. Part of the problem is the shift to computers and mobile devices, but I think a bigger part is why by a DVD or Blu-ray when you can get almost the same quality as blu-ray with the convenience of streaming. You would think it would make 4K blu-ray more likely as there is no streaming equivalent of a high quality profile 4K with WCG data. You would think they would want to push it out as fast as possible because they would be hedging against the internet actually getting fast enough and big enough data caps to make 4K streaming viable. Something which is probably 5 years away at least for most of the US population.

yeah for me the difference in audio quality is huge.... compared to streaming but I can honestly see how A LOT of people will sacrifice a decent amount of quality for the lazy factor of being able to just pull something up on netflix. Not to mention a great deal of people at home wont have high-end or even mid to highend setups to see or hear what they are missing.

Streaming isn't the same quality of Blu-ray, but the convenience makes up for it for most films. I only buy a Blu-ray anymore if it's a "showcase my theater" quality item. For other films that aren't audio/visual awe-fests, I'm happy to purchase a Digital Copy.

There is a solution to this problem. It's called 4K Blu-Ray. Physical media will be able to produce PQ that streaming can't match. Reviews of Netflix 4K are saying it's not much better than 1080p. The BDA needs to get their crap together, agree on a standard (which hopefully includes support for REC.2020 and HDR) and get it out as fast as possible. Not to mention, the average American household doesn't have the bandwidth to stream UHD.

Once 4K Blu-Ray is finally out they need to be aggressive with the pricing. The main reason DVD is taking so long to die off is because it's so cheap. Sure DVD doesn't look or sound as good but the average family doesn't really care. They'd rather save the extra $10 and let their TV upscale the movie. The same thing can easily happen this transition. They need to heavily advertise the advantages of 4K Blu-Ray and then price it at no more than $25 (for standard disk set). Then in order to eliminate confusion, the BDA should kill off 1080p Blu-Ray. Then they would have one format that looks great on 1080 displays and even better on a UHD display, all for the same price as a standard Blu-Ray. Sounds like a winner to me.

In my household we have access to very fast internet but unfortunately it gets bogged down quickly. Most days we have a PS4 that is downloading or playing online, a PS3 that is streaming HD Netflix and a computer that is streaming or surfing the web. That doesn't even include the portable devices. So for my household (and I'm sure many others are similar to mine) 4K Blu-Ray will be my only option for getting higher res content.

There is a solution to this problem. It's called 4K Blu-Ray. Physical media will be able to produce PQ that streaming can't match. Reviews of Netflix 4K are saying it's not much better than 1080p. The BDA needs to get their crap together, agree on a standard (which hopefully includes support for REC.2020 and HDR) and get it out as fast as possible. Not to mention, the average American household doesn't have the bandwidth to stream UHD.

Once 4K Blu-Ray is finally out they need to be aggressive with the pricing. The main reason DVD is taking so long to die off is because it's so cheap. Sure DVD doesn't look or sound as good but the average family doesn't really care. They'd rather save the extra $10 and let their TV upscale the movie. The same thing can easily happen this transition. They need to heavily advertise the advantages of 4K Blu-Ray and then price it at no more than $25 (for standard disk set). Then in order to eliminate confusion, the BDA should kill off 1080p Blu-Ray. Then they would have one format that looks great on 1080 displays and even better on a UHD display, all for the same price as a standard Blu-Ray. Sounds like a winner to me.

In my household we have access to very fast internet but unfortunately it gets bogged down quickly. Most days we have a PS4 that is downloading or playing online, a PS3 that is streaming HD Netflix and a computer that is streaming or surfing the web. That doesn't even include the portable devices. So for my household (and I'm sure many others are similar to mine) 4K Blu-Ray will be my only option for getting higher res content.

I'm skeptical about the viability of yet another disc-based format. New hardware + new discs that are not backward compatible = a recipe for huge losses IMO. I just got my Amazon Fire TV, and the speed + convenience of that device makes me want to fold the Blu-ray tent forever.

I'm skeptical about the viability of yet another disc-based format. New hardware + new discs that are not backward compatible = a recipe for huge losses IMO. I just got my Amazon Fire TV, and the speed + convenience of that device makes me want to fold the Blu-ray tent forever.

I agree. In fact, I think that Sony basically just announced there will be no 4k disc, period. And I'm really sad for that.

People embraced the leap from VHS to DVD not just because of the better quality a/v it offered (too subjective for many), but because of other benefits:
-no rewinding
-no degrading the quality over repeated viewings
-no issues with tracking
-smaller physical size
-easy ability to store bonus features

The jump from DVD to Bluray didn't really bring anything like that. If someone doesnt care to look for quality differences, or has a smaller television, there isn't much Bluray provides that they can't get from a DVD.

Moving from DVD/Bluray to streaming has some more advantages:
-no need to physically store it
-not possible to damage it
-available immediately on demand
-extremely portable
-no moving parts to break

^Yea, but you're satisfied with a middling Vizio performer as your main display. :P

Satisfied, yes. It's not like I'm unaware of the superior performance of other TVs. I'm not rich. I'm lucky because I know how to perform a pro calibration and I use a bias light, so I get a lot out of it. That doesn't mean I don't plan on upgrading. I had an Epson 8350 set up as recently as February, but FP is too much hassle. I'm looking for a 70-inch backlit with local dimming. Yes, it'll probably be a Vizio.

People embraced the leap from VHS to DVD not just because of the better quality a/v it offered (too subjective for many), but because of other benefits:
-no rewinding
-no degrading the quality over repeated viewings
-no issues with tracking
-smaller physical size
-easy ability to store bonus features

The jump from DVD to Bluray didn't really bring anything like that. If someone doesnt care to look for quality differences, or has a smaller television, there isn't much Bluray provides that they can't get from a DVD.

Moving from DVD/Bluray to streaming has some more advantages:
-no need to physically store it
-not possible to damage it
-available immediately on demand
-extremely portable
-no moving parts to break

Let's not forget that many of us already purchase instead of rent digitally. Your mention of advantages doesn't mention that many services do or soon will offer us to download vs stream content that we have purchased if we prefer.

I agree. In fact, I think that Sony basically just announced there will be no 4k disc, period. And I'm really sad for that.

I think the studios announced that when they started giving away free digital copies with most blu-ray purchases. It really doesn't matter what Sony wants. And it matters only slightly more what the consumer wants. What matters is what the studios want. They want to hook the mass customer base on streaming. The overhead is relatively minimal - and most of the infrastructure is paid for by the consumer. They host a file.

They don't want to pay to manufacture discs anymore. They don't want to pay to ship/transport discs anymore. They don't want consumers to be able to sell their media on the second-hand market anymore, since they don't see any profit on second-hand sales.

From the formation of the UltraViolet organization, the studios have been pushing to hook consumers on streaming. It's a better situation for the studios, quite frankly. "Give away a free digital copy and let them see how easy it is."

Mark, you are a bit of an enigma. You are a THX Certified pro and clearly knowledgeable in the AV area. However, based on your recent articles and postings, it is clear to me that pretty good performance is good enough for you. There is nothing wrong with that (in fact I largely subscribe to that same philosphy), but there is a tangible performance difference between streaming and Blu-ray in both video and audio quality, especially for those of us with projection systems and 7.1 or more sound systems. There is also the fact that having a super fast connection is still very expensive and not available in most places and there are a lot of titles (including new ones) not available via streaming. You may be right that the masses will kill blu-ray and the possibility of 4k blu-ray (after all, look at the success of poor quality compressed digital music files), but I, for one, hope not. If it does happen, it will be one more example of technology and society moving backwards.

People embraced the leap from VHS to DVD not just because of the better quality a/v it offered (too subjective for many), but because of other benefits:
-no rewinding
-no degrading the quality over repeated viewings
-no issues with tracking
-smaller physical size
-easy ability to store bonus features

The jump from DVD to Bluray didn't really bring anything like that. If someone doesnt care to look for quality differences, or has a smaller television, there isn't much Bluray provides that they can't get from a DVD.

Moving from DVD/Bluray to streaming has some more advantages:
-no need to physically store it
-not possible to damage it
-available immediately on demand
-extremely portable
-no moving parts to break

Good points. IMO this is just another reason to throw in REC.2020 and HDR. Give people something that is only possible with 4K Blu-Ray and is easily seen. Higher resolution is good and fine but for the average viewer it makes very little- no difference depending on screen size and viewing distance. I think it's fair to say that if 4K Blu-Ray brings a bump in resolution and nothing else, it will fall flat on its face just like Blu-Ray 3D.

UHD resolution is established. Now manufacturers need to take things past just higher resolution.

Sony is ultimately to blame. They price everything too high, they wait 8 years to update the specs on Blu ray, their software is also really expensive to author a Blu ray disc, the cost of a blank 25gb disc is way more than what a 4.7 gb DVD was 8 years into its run. And they've done the same thing with 3D, so that's going nowhere for those that want to author professional 3D discs with full HD bit rate. All of that and trying to compete in a digital streaming world?

People embraced the leap from VHS to DVD not just because of the better quality a/v it offered (too subjective for many), but because of other benefits:
-no rewinding
-no degrading the quality over repeated viewings
-no issues with tracking
-smaller physical size
-easy ability to store bonus features

The jump from DVD to Bluray didn't really bring anything like that. If someone doesnt care to look for quality differences, or has a smaller television, there isn't much Bluray provides that they can't get from a DVD.

Moving from DVD/Bluray to streaming has some more advantages:
-no need to physically store it
-not possible to damage it
-available immediately on demand
-extremely portable
-no moving parts to break

+1 that the general movie watching population (no one on this site) cares far more about convenience and that's what is ultimately killing off bluray. I honestly don't know what someone like me will be doing in 5 years for watching movies at home? I want the best experience possible but who knows if that will be bluray or streaming? It's a shame too because I love the upgraded PQ / AQ, but it's the AQ that keeps me purchasing physical media. If streaming can't or won't include the lossless audio tracks I have no interest in paying comparable prices (streaming vs bluray) for a lesser experience.

Don't know what the fuzz is about. I admit that I totally gave up on buying CD's and I put most of the existing CD's on HDD's already. But Blu Ray is another story. Still buy around 6 Movies a month, maybe more around crazy holidays when the prizes are right. If I want to use streaming I will do it in my own home theater. I rip every new disk on HDD and then watch it as a MKV remux through my HTPC. Picture quality is great, but convenience is also great. What else does one want?

Mark, you are a bit of an enigma. You are a THX Certified pro and clearly knowledgeable in the AV area. However, based on your recent articles and postings, it is clear to me that pretty good performance is good enough for you. There is nothing wrong with that (in fact I largely subscribe to that same philosphy), but there is a tangible performance difference between streaming and Blu-ray in both video and audio quality, especially for those of us with projection systems and 7.1 or more sound systems. There is also the fact that having a super fast connection is still very expensive and not available in most places and there are a lot of titles (including new ones) not available via streaming. You may be right that the masses will kill blu-ray and the possibility of 4k blu-ray (after all, look at the success of poor quality compressed digital music files), but I, for one, hope not. If it does happen, it will be one more example of technology and society moving backwards.

I fully recognize the superiority of the Blu-ray format versus current streaming formats. Yet, over the past month I have babysat a Kaleidescape Cinema One that allows me to download actual Blu-ray data, no disc required. The capability is managed through UltraViolet, so as far as I can tell, there's no real reason Blu-ray as a format has to remain disc-bound.

Ultimately, what I see is a difference between streaming and downloads—not a difference between physical formats and online delivery. At some point soon, downloads will pick up where discs left off.

Based on numerous anecdotal reports, and now from Sony's own mouth, the USA (well, North America) is the last bastion of Blu-ray fandom. The same was true for plasma TV, which is going away despite (relative) popularity stateside; it's a global economy and the US can't support a mass-market media format or display technology single-handedly.

blue rays need to be in the $14.99 to $20 maximum. It's crazy that they want over 30$ for some 3D movies. Like really, no wonder people quit buying them. I myself buy Blu-s buy the bucket load, I generally get 20 at least a month, mostly from Amazon and Ebay. Streaming on any service may look ok but lack of hi-res audio doesn't sit well with my 30K audio setup......

I think the studios announced that when they started giving away free digital copies with most blu-ray purchases. It really doesn't matter what Sony wants. And it matters only slightly more what the consumer wants. What matters is what the studios want. They want to hook the mass customer base on streaming. The overhead is relatively minimal - and most of the infrastructure is paid for by the consumer. They host a file.

They don't want to pay to manufacture discs anymore. They don't want to pay to ship/transport discs anymore. They don't want consumers to be able to sell their media on the second-hand market anymore, since they don't see any profit on second-hand sales.

From the formation of the UltraViolet organization, the studios have been pushing to hook consumers on streaming. It's a better situation for the studios, quite frankly. "Give away a free digital copy and let them see how easy it is."

I agree with you. What I was pointing out is that, until now, the Blu-ray consortium said they were evaluating the feasibility of a 4k blu. There even was sort of a date (holiday season 2015),

With this public announcement Sony declared that optical media is dying.

If sony would stop being greedy and lower the bluray prices to finally kill off DVD then you would see bluray adoption skyrocket. Stop bundling, stop the $40 3d price gouging, compete in price and flourish.

Satisfied, yes. It's not like I'm unaware of the superior performance of other TVs. I'm not rich. I'm lucky because I know how to perform a pro calibration and I use a bias light, so I get a lot out of it. That doesn't mean I don't plan on upgrading. I had an Epson 8350 set up as recently as February, but FP is too much hassle. I'm looking for a 70-inch backlit with local dimming. Yes, it'll probably be a Vizio.

Exactly right! While many here feel they need the audio and video quality of Blu-ray, the great unwashed masses find the price and convenience of the streaming services outweighs the need for quality. In this case “Good enough” is the enemy of “Perfect”.

It's unlikely to ever happen given what is taking place with bandwidth, expansion, providers, and costs.

And it will be even worse with 4K.

Assuming online delivery stays with h.264, sure. But they're not going to. Once h.265 or AVEC has been perfected and proven we'll see much smaller files for the same quality, which will lead to better quality in the long run.

Blu-ray quality? I don't know, I haven't played with the compression yet. Better quality? Absolutely. 1080p files will be much smaller. 4K files will be less taxing on our bandwidth.

Remember, progress has to occur on all fronts, and it is. You can't just jump to a conclusion based on today's tech. You have to account for better compression, too.

A few years ago I would have definitely agreed. I thought by now every home would have a NAS that would act as their media storage hub for their home and their wireless devices.

But with concepts like Google Play Music, Amazon Cloud Player, iCloud, etc I think people are moving towards allowing all their stuff to be stored on a corporate server.

An A/V enthusiast would want a download due to downstream bandwidth issues, but I don't think there are enough of us to push the needle into that direction.

You also are going to need a moderately large hard drive that I assume would have to be somewhat proprietary in nature to keep hackers from plugging them into computers and pirating the films. That will add a decent amount to the cost. No big deal for someone who currently uses an HTPC and/or NAS/sever, but that could be asking a lot for typical consumer.